D.R. Horton, the largest homebuilder in the United States, is partnering with Portland-based startup Prophetic to speed up land identification and development through an AI-driven zoning analysis tool. The company said the technology will help address the country’s housing shortage, which researchers estimate at roughly 4 million homes due to chronic underbuilding since the Great Recession. The tight supply has contributed to home prices rising more than 50% from pre-pandemic levels.
Homebuilders say rising construction costs and the slow, expensive process of securing developable land have constrained their ability to respond. Jason Jones, vice president of data analytics at D.R. Horton, said in a statement that finding, acquiring and entitling land remains one of the biggest challenges in providing affordable housing. Jones said the company expects Prophetic’s insights to help expand homeownership opportunities.
Prophetic has created an AI-native platform that analyzes zoning regulations for land acquisition and development. The system pulls zoning manuals from every city and county in a given state and currently operates in 25 states, with plans to expand nationwide by June. Founder and CEO Oliver Alexander said the process involves extracting rules from tens of thousands of documents, describing it as a detail-oriented task that AI can handle more efficiently.
The platform examines factors such as minimum lot size, minimum and maximum density and setbacks, which vary by municipality and zoning category. Prophetic updates the data quarterly and provides citations showing where each extracted detail originated. Alexander said the citations build trust with developers and reduce the time required to evaluate a parcel’s development potential from hours to about 30 seconds.
Alexander said Prophetic has identified more than 440,000 distinct ways zoning rules describe what can be built on a piece of land in the states it has analyzed. Developers must interpret these rules to determine whether land can support single-family or multifamily homes. Prophetic’s large language model processes the documents at scale and combines the zoning analysis with search capabilities, which Alexander described as “the major unlock.” Builders can determine what they can build, where they can build it and in what quantity far more quickly than before.
Alexander said this speed gives builders a competitive advantage over landowners and other developers. By making faster decisions, he said, builders can secure viable parcels before others fully assess them.
Featured image credits: Freepik
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